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Over work in the age of automation

Change incentives and economic priorities to reduce work hours


The Jetsons is a space-age cartoon following a family of the same name. They enjoy many of the luxuries you would expect in the future that save time. Flying cars. A robot housekeeper who cooks and cleans. Fancy tech gadgets. George Jetson, the father, works at Spacely's Sprockets operating the Referential Universal Digital Indexer (RUDI) by pushing buttons. On reflection, it's bizarre he has that job in the first place given the level of technology. Surely a robot could do such a simple job for him?


The Jetsons is just a cartoon, but in the real world, we also grapple with the relationship between automation, labour and time. In 2020, we are on the precipice of a wave of automation with chatbots, algorithms, smart home devices and other tech changing how we organise our lives and economies. Will people become obsolete? Doubt it. Certain jobs and work activities probably will though, saving time.


People being people find ways to spend 'saved' time, and don't always reap the full benefits that saving time allows due to incorrect incentives, and what time is considered 'productive'. This article explores the dynamics between time-saving and work-life.


During the 19th/20th century hours worked reduced dramatically


This table from Our World in Data is a big feel-good story. It beautifully demonstrates the extent to which working hours have reduced in major developed economies. Between 1870 and 2000, work hours reduced by approximately 26 hours. That's huge and has given people a lot more choice in how they spend their time. Much of this reduction is due to labor-saving devices (e.g. microwaves).


Weekly work hours


Despite more opportunities for leisure, saving time at work hasn't transferred one-to-one to leisure time. Compared to 1950, we only need to work 11 hours a week to produce the same amount as 40 hours did back then. All else equal, that would suggest we only need to work 11 hours to have the same standard of living.


We don't of course, despite the opportunity for more leisure time a five-day 40-hour week is standard. You wouldn't expect efficiency improvements to be transferred fully into leisure time. Given the opportunity, people will work more to earn more. That we don't work much shorter weeks suggests production and incomes are prioritised over leisure, at least to some extent.


Efficiency improvements can be 'used' to reduce work rather than increase production. That is difficult unless work can become more outcome-oriented


When Keynes first hypothesised that his grandchildren would be working 15-hour weeks he seriously underestimated the extent to which people can be picky, develop imaginary deadlines and create work unnecessarily. He also underestimated the incentives of people, firms and the economy to prioritise production over leisure.


Given efficiency improvements (e.g. innovations that saving time), companies are incentivised to cut cost, or create new work to justify roles. Efficiency doesn't save time, it saves money and enables people to do other things with their time. Employment contracts are fundamentally not outcome-oriented, they trade time for money - which makes it difficult to trade efficiency gains for leisure time.


Outcome-oriented work means paying someone to produce a result. For example, a goal of $10,000 of sales per week. That could take 20 hours or it could take 60 hours. If it takes 20 hours companies don't traditionally let that person take time off for the remaining 20 hours. The $10,000 sales target might even double. Work expands to fill the time available. People may not know what to do with themselves either, defining themselves by their work.


Most employment contracts trade time for money, rather than achieving an outcome. This is a tale of wrong incentives. If some clever cookie develops a way to automate their role, they might make themselves redundant. Time off instead isn't really an option, nor is it adequately incentivized as if people work fewer hours, incomes tend to fall. Better off surfing the internet than pretend you don't have enough work to do right?


Organisations and people may lack the imagination to be outcome-oriented with structures unable to adjust smoothly to work and income not being measured in hours. There are alternatives to the five-day week. Work from home and flexible hours arrangements are just the start. Another option could be four days on, one day of training. Organisations should get creative about finding alternatives that work for staff.


The economy doesn't really value free time


The fundamental barrier to trading efficiency gains for leisure is that the economy doesn't value free time, it values time spent on production. Businesses are not designed to value free time - they are designed to make a profit.


An hour spent with family has less economic value than an hour spent at work, in theory, because time spent at work contributes to profits and GDP. So long as the economy and businesses operate that way, we will continue to prioritise work over free time.


The development of cars, microwaves, computers, etc. through the 20th century did wonders to save time both at work and for households. However, it hasn't enabled as much free time as it could have because of how economies value and incentivise production.


New technologies emerging in robotics and artificial intelligence will create more opportunities for free time with robots replacing people in many industries. The exact impact on work remains to be seen - perhaps we will end up like George Jetson, punching buttons aimlessly. Much of the focus in response to automation is on retraining programmes and avoiding mass redundancy. Why don’t we take a day off?



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© Byte Size Story / Byte Size Economics 2020

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A New Zealand based politics and economics blog

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